FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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On January 1,2021 a company issues $700,000 of 6% bonds due in ten years with interest payable semiannually on June 30 and December 31 each year assuming the marked interest rate on the issue date is 7% the bonds will issue at 650,256
1. fill in the blanks in the amortation schedule below
2. records the bond issue in janary 1,2021 and the first two semiannual interest payment in June 30,2021 and bexember 31, 2021
Transcribed Image Text:**Bond Issuance and Amortization Schedule**
**Scenario:**
On January 1, 2021, a company issues $700,000 of 6% bonds, due in ten years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 7%, the bonds will issue at $650,256.
**Instructions:**
1. **Amortization Schedule:**
Fill in the blanks in the amortization schedule below.
*Round your answers to the nearest dollar amount. Enter all amounts as positive values.*
| Date | Cash Paid | Interest Expense | Change in Carrying Value | Carrying Value |
|------------|-----------|------------------|---------------------------|----------------|
| 01/01/2021 | | | | |
| 06/30/2021 | | | | |
| 12/31/2021 | | | | |
2. **Journal Entries:**
Record the bond issue on January 1, 2021, and the first two semi-annual interest payments on June 30, 2021, and December 31, 2021.
*(If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest dollar amount.)*
**Journal Entry Worksheet:**
- Record the bond issue on January 1, 2021.
- Note: Enter debits before credits.
| Date | General Journal | Debit | Credit |
|------|-----------------|-------|--------|
| | | | |
By following these steps, students can accurately complete the bond issuance and amortization tasks, gaining practical financial accounting skills.
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